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J D Wetherspoon predicts post-summer 2012 sales drop

By Peter Ruddick , 14-Sep-2012

Related topics: Business, Venues, Trends & Reports, Pubs & Bars

Pub operator J D Wetherspoon has become the latest hospitality business to warn of the possible sales growth 'hangover' following a summer of sport, the Olympics and headline events.

J D Wetherspoon has become the latest hospitality operator to warn of the possible trading 'hangover' after a busy summer of sport and events

J D Wetherspoon has become the latest hospitality operator to warn of the possible trading 'hangover' after a busy summer of sport and events

Revealing its trading performance in the 53 weeks to 29 July, the Watford-based company announced a rise in like-for-like sales of 3.2 per cent.

Total sales grew by 11.7 per cent to £1.19bn with like-for-like bar sales up by nearly 3 per cent and food sales jumping by nearly 5 per cent in the period.

Sustain growth

Founder and chairman Tim Martin praised the impact of the summer's sporting events on trading performance but said he did not expect the business to keep up the level as the memories of the Games fade.

"In the six weeks to 9 September 2012, like-for-like sales increased by 8.4 per cent, with total sales increasing by 12.8 per cent, helped by a strong performance during the Olympic and Paralympic Games." 

"Sales this summer have been enhanced by a number of one-off events and we do not expect to sustain this level of growth. As previously indicated, it is anticipated that taxation and input costs will continue to rise. Overall therefore, the company is aiming for a reasonable outcome, in the current financial year,” he said.

Earlier this week BigHospitality reported a number of hotel and restaurant operators were considering the opportunities and challenges a year without the same number of big, one-off events could bring .

Marketing executives have termed next year 'Empty 2013' and while some hoteliers have warned business could be impacted Horizons Foodservice left a comment in our LinkedIn group questioning the impact of this year's events and therefore any downturn  as a result in the next twelve months.

Taxing times

In the last year J D Wetherspoon saw operating margin after exceptional items drop to 7.8 per cent, down from 9 per cent a year earlier. Martin attributed the fall in margin, despite the rise in sales, to the continuing level of taxation imposed on pubs compared to retail and supermarkets in particular.

"All pubs and pub companies are, or should be, happy to pay their share of tax, but the pub industry has been fleeced by the government, in the last decade and a half in particular – resulting in fewer jobs and lower taxes, but more supermarkets, in the UK."

In the publication of its Statistical Handbook 2012, the British Beer and Pub Association (BBPA) claimed British beer drinkers now pay nine times more beer tax than the French and 13 times more than the Germans.

Martin, who earlier this year said JD Wetherspoon would be reducing its planned number of openings,  said the company had opened 40 pubs in the last year and closed another three. The estate, which currently stands at around 860, is expected to grow by another 25 pubs by the end of July 2013.

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